When It Comes to Streetcars and Economic Development, There's So Much We Don't Know

In the wake of the Great Recession, it's become common for city officials to describe public transportation as a tool for economic development as much as (or more than) an instrument for urban mobility. Take two recent examples.

Here's Senator Claire McCaskill reacting to a new federal TIGER grant awarded to the Kansas City streetcar:

"This streetcar project will encourage housing, construction, and business development in the city—and that will mean more jobs across the region."

And here's regional transport planner Carmine Palombo of the Southeast Michigan Council of Governments on the idea of bringing bus-rapid transit to Detroit:

"The stations with BRT are much more than just a bus stop. There’s example after example of economic development," he says.

The precise wording may vary, but what such quotes suggest that the economic effects of BRT and streetcars are well-known. Transport scholar and Transportationist blogger David Levinson isn't so sure that's the case. In two recent posts reviewing the evidence, he found that we know a lot about what BRT is worth to a city but very little about the value of streetcars.

First the BRT literature. Levinson scrounged up a good deal of it from around the world. In Seoul, Korea, for instance, BRT led to residential developers to convert single-family homes into multi-family apartments, created land premiums of 10 percent for residences and 25 percent for retail near stops, and increased employment density by 54 percent. In Bogota, Colombia, rental prices drop 7 to 9 percent for every five more minutes a person must walk to reach a BRT station.

There are some encouraging findings from the United States, too, despite the country's slow adoption of BRT. A study of the Pittsburgh busway found that properties a thousand feet from BRT stations were worth about $10,000 less than those a hundred feet away [PDF]. In Boston, recent condo sales showed a 7.6 percent premium along the BRT Silver Line, whereas no such premium existed in the corridor before the bus [PDF].

Now for the streetcar literature. Unfortunately, Levinson was able to find far less of it. A 2010 survey of 13 U.S. streetcar systems, sponsored by the Federal Transit Administration, concluded that the economic impact of streetcars remains largely unknown. System representatives "believed" that streetcars enhance development but didn't actually "seek information" about this economic impact — perhaps because there's not much to seek [PDF]:

The literature regarding empirical measurement of actual changes in economic activity, such as changes in retail sales, visitors, or job growth, is almost nonexistent for streetcars.

The glaring exception is Portland, Oregon, where one study found that streetcars did contribute $778 million in local development against a project cost of $95 million [PDF]. But while the Portland streetcar was the anchor or at least the featured element of this growth, it wasn't responsible for this boom by itself. Rather, it was part of a broader development plan in which zoning, public-private investment, street upgrades, and other renewal efforts also played considerable roles.

So for now, the research advantage clearly goes to BRT.

That's not to say streetcars don't give cities an economic boost — promoting walkability for residents and suggesting permanence to developments must carry some value — but it is to say that this boost isn't well-understood. The modern U.S. streetcar craze is a relatively new one, and isolating its economic impact will take time. This knowledge gap is a particular problem for streetcars, however, because their benefit to pure urban mobility is already questioned.

There's every reason to believe that strong public transit is worth loads to a city. In its simplest form: mobility creates access, access gathers people, people produce things. But the limits of transport funding make it important to distinguish weak transit from strong, and strong transit from stronger. Poor information won't stop public officials from making promises, but good information at least gives them a chance to spend your money in wiser ways.

Top image: Portland's streetcar is often credited with hundreds of millions worth of economic development. (Adam Fagen/Flickr.com)

About the Author

Eric Jaffe is CityLab’s New York bureau chief. He writes about transportation, behavior, and history, and has a general interest in the science of city life. He's the author of A Curious Madness (2014) and The King's Best Highway (2010), and lives in New York.